Luxury median sales prices surged by 25% to over $6MM from Q4 2014.
New Development closing sales prices rose by 15.37% to $2,059,411
Closing time to close deals has fallen by 21.9% to 82 days, from 105 days in Q4 2014
The fourth quarter Manhattan market ended seeing fantastic price movement. Median sales prices rose 17.3%, average sales prices rose 12.1%, and the absorption rates slightly slowing down. With the average sales price of apartments 69% higher than median sales prices, we can see that new development sales are far outpacing re-sales, and that ultra-luxury housing is still quite competitive!
What is most impressive is comparing Q4 2014 figures, we see that across the market: prices, number of sales, absorption rates, etc. all went in the right direction. New Development executed sales prices rose by 15.37% to $2,059,411 and re-sales followed suit with prices increasing by 8.1% to $960,000.
Luxury median sales prices surged by 25% to over $6MM from Q4 2014. The sharp increase was largely attributable to the 78.6% jump in closings at or above the $5MM mark, and the popularity of the new development market. Re-sales slipped by 1% in the same period, while the new development sales more than doubled. This quarter accounted for 18.6% of closings in the market, up from 10% a year ago.
With the high volume of sales contracts in the pipeline waiting for completion of construction, new development activity could nearly double over the next year. The heavy contract volume that is now closing was not reflected in surging sales market conditions of 2013-2014. Listing inventory edged 1% higher to 5,046 with new development inventory falling sharply, offsetting rising resale inventory. For the second consecutive quarter, the amount of active new development listings, which doesn’t include units not yet formally offered by sponsors, was cut in half. This was likely an effort by developers to offset the expansion of new development product coming online over the next year.
The overall absorption rate, shortened to 5.1 months from 5.5 months since the same quarter a year ago for new construction. Re-sales saw this number improve as well to 5.3 months, which reached 7.4 months average at the start of the credit crisis 8 years ago. Furthermore, execution time to close deals has fallen by 21.9% to 82 days. This could reflect high level of cash buyers in the market.
The conclusion is that the market health keeps improving and demand has not slowed, it has in fact progressed. We can see that prices are moving up and execution time is accelerating. The demand for housing is quite strong, which points to economic confidence and stronger demands for Manhattan housing. With expectations that if housing prices do not continue to go up, they will at least be flat but it is still a good time to buy!
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